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Questions are being raised about Federal Reserve Bank of New York Chairman Stephen Friedman's ties to Goldman Sachs. The New York Fed was instrumental in crafting a government plan that allowed Goldman to become a bank holding company late last year, when Friedman sat on the company's board. The conflict could be a preview of similar cases to come as the U.S. government becomes more deeply involved in private businesses.

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Federal Reserve Vice Chairman Donald Kohn granted a controversial waiver that allowed Stephen Friedman to keep his position as chairman of the Federal Reserve Bank of New York. A Fed official said Chairman Ben Bernanke and the rest of the Fed's board of governors supported the waiver. The waiver was necessary because Friedman owned Goldman Sachs shares, and the Fed began overseeing the bank in September.

Federal Reserve Vice Chairman Donald Kohn granted a controversial waiver that allowed Stephen Friedman to keep his position as chairman of the Federal Reserve Bank of New York. A Fed official said Chairman Ben Bernanke and the rest of the Fed's board of governors supported the waiver. The waiver was necessary because Friedman owned Goldman Sachs shares, and the Fed began overseeing the bank in September.

Questions about Stephen Friedman's roles as director of the Federal Reserve Bank of New York and Goldman Sachs director and shareholder prompted him to resign as chairman of the Fed bank. "Although I have been in compliance with the rules, my public service motivated continuation on the Reserve Bank board is being mischaracterized as improper," Friedman wrote in a letter to William Dudley, president of the New York bank. "The Federal Reserve System has important work to do and does not need this distraction."

Questions about Stephen Friedman's roles as director of the Federal Reserve Bank of New York and Goldman Sachs director and shareholder prompted him to resign as chairman of the Fed bank. "Although I have been in compliance with the rules, my public service motivated continuation on the Reserve Bank board is being mischaracterized as improper," Friedman wrote in a letter to William Dudley, president of the New York bank. "The Federal Reserve System has important work to do and does not need this distraction."

Questions about Stephen Friedman's roles as director of the Federal Reserve Bank of New York and Goldman Sachs director and shareholder prompted him to resign as chairman of the Fed bank. "Although I have been in compliance with the rules, my public service motivated continuation on the Reserve Bank board is being mischaracterized as improper," Friedman wrote in a letter to William Dudley, president of the New York bank. "The Federal Reserve System has important work to do and does not need this distraction."